Robert L. Schulz And “We The People” Sued By Feds To Stop Tax Scam

The Justice Department has sued to stop Robert L. Schulz from selling a tax fraud scheme said to have cost the U.S. more than $21 million. Also named in the suit are two corporations, We the People Foundation for Constitutional Education Inc., and We the People Congress Inc.

Many of my California clients – particularly those in Los Angeles County, Orange County, Ventura County and Santa Barbara County – have used We the People to prepare their California living trusts, California Wills, California durable powers of attorney and California advance health care directive only to meet with me later to remedy problems arising in connection with poorly prepared estate plans.

The government says Schulz used the two We the People entities to market a nationwide tax fraud scheme, called the Tax Termination Package, to employers and employees. According to the government, the Tax Termination Package includes We the People forms, which the defendants tell their customers can be used to replace forms the IRS requires employers and employees must use in connection with federal tax withholding from wages.

The suit says that Schulz and the We the People entities state that use of the replacement forms will allow customers to legally stop tax withholding and that these statements are false. According to the complaint, the defendants base the scheme on frivolous arguments about federal tax laws that federal courts have repeatedly rejected. These schemes are on the IRS’s 2007 list of the Dirty Dozen tax scams.

People who sell tax scams and their customers temporarily enrich themselves at the expense of law-abiding taxpayers. The Justice Department and the Internal Revenue Service are determined to stamp out these scams.

Since 2001 the Justice Department has obtained more than 230 injunctions stopping the promotion of tax fraud schemes and the preparation of fraudulent returns.

SPOTLIGHT #1: The IRS - Income Tax Highlights Current tax policy is often a creature of history. To understand the origins of current tax laws, peruse a brief synopsis describing the development of the income tax over the last 150 years.